why ascp not mrp
TRANSCRIPT
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Keefe Ho
Principal Consultant
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Move from MRP to Advanced Planning Case Sharing
The Coverage of Advanced Planning in Industry
Operation Dilemma - Industry Drivers
Why Advanced Planning, Not MRP
Case Background - The Problem & Business Requirement
How we approach it
Share Lessen Learnt with You
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The Coverage of Advanced Planning in Industry
3rd PL
Component Mfg
Sitex
Hubx
Contract Mfg
2nd Suppliers
Retail
Sub AssyMfg
Supply Base You
Distribution Customers
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Industry Transformation
Today
Customer forecast errorsresult in missed deliveries
Excessive inventories Outsource to fill product line
gaps and reduce cost
Independently developedproducts for broad use
Manual and point-to-pointcollaboration
Demand variability does notadversely impact service levels
Planning for strategic inventorymanagement
Outsource anything that is non-core and not proprietary
Customer-specific designs andproducts
Pervasive network collaboration
Tomorrow
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Reduce Time-to-MarketInvest in R&D for Next Gen Technologies
Convert Design Ins into Design Wins
Sustain Profitability & Improve MarginsFocus on Core Competencies
Streamline Operations, Manage Costs
Improve Customer ResponsivenessAccept Your Customers Bad Forecasts
Gain Real-Time Global Supply & Demand Visibility
Industry Goals
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Forecast Accuracy 25-80%
Productivity 30%
Profit Margin 5-15%
Inventory Carrying Cost 25-60%
Order Fulfillment Time 30-50%
Total Supply Chain Costs 25-50%
Source: Pittiglio Rabin Todd & McGrath (PRTM)
Industry Opportunities
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Why ASCP, Not MRPMRP ASCP
Core Objectives Material-related
Material-related
Capacity-related
Production/Operationscheduling
Planning Procedure Sequential processes Holistic processes
Planning Scope Facility Single-site model Multi-sites model
Planning Scope Material All planned item in one Both,Two-level planning
Constrained/Optimized Planning Not supported Supported
Decision-making Support Not enabled Enabled
Performance Indicators None KPIs provided
ATP Statement Generation Not supported Supported
Planning by Priority Stuck to due-date Priority prior to due-date
Biz Solution Extension Limited Diversified
Oracle ToolsFeatures
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RT-SMT
Comp
Factory
RT-Outside
Comp
Outsourcing
Supp1
Hub1
Cust2
Cust3
Cust4
TR
Hub1TR
Cust1TR
RT-DIP RT-ASY
TRRT-SMT
Comp
Factory
RT-DIP RT-ASY
Supp2
Supp2
TR
TR
Move from MRP to Advanced Planning
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Move from MRP to Advanced Planning
Case BackgroundThe Problem & Business Requirement
Multiple Legal Entity & Multiple Inventory Organizationspread in TW & CN
Frequent product updates
High consumer demand
Limited manufacturing capacity
Long lead times (Long Planning Cycle) Powerful retailers
M f MRP t Ad d Pl i
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RT-SMT
Comp
Factory
RT-Outside
Comp
Outsourcing
Supp1
Hub1
Cust2
Cust3
Cust4
TR
Hub1TR
Cust1TR
RT-DIP RT-ASY
TR
RT-SMT
Comp
Factory
RT-DIP RT-ASY
Supp2
Supp2
TR
TR
Move from MRP to Advanced PlanningThe Problems or Pains
Problem Size :Num of Org : 9 Num of Item :50000 Num of Suppliers:500Level of BOM : 8 Level of Routing: 3~5 Num of Operation/per Routing: 1~2
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Move from MRP to Advanced Planning
Business Requirement Multi-Org Planning: Single global supply chain plan to execute from
Intelligent Substitution of Items: To be able to optimize the inventoryby minimizing the creation of new supplies when the demand can besatisfied by substitution, thus reducing inventory carrying cost,reducing obsolescence and increasing the service levels.
Alternate Routing: Optimal use of resources to build the products byselecting the best available alternate routings.
Capacity fulfillment for Internal production & outside supplier
Accurate Order Promising
Building a well defined forecasting process and ability to consumethe sales orders from the forecast.
Move from MRP to Advanced Planning
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TR
Hub2
RT-SMT
Comp
Factory- TW
RT-Outside
Comp
Outsourcing
Supp1
Hub3
Cust2
Cust3
Cust4
TR
Hub1TR
Cust1TR
RT-DIP RT-ASY
TR
RT-SMT
Comp
Factory- CN
RT-DIP RT-ASY
Supp2
Supp3
TR
TR
Move from MRP to Advanced PlanningBusiness Requirements
2. Semi-FG supplied by Factory-CN
3. Alternate Sourcing from Factory-CN
6.
Bonde
dvs
non-Bond
ed
M f MRP Ad d Pl i
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Move from MRP to Advanced Planning
Business Gains
Did in Legacy Apps Doing in OracleMulti-ORG Planning 2 ORG w/ Guts feeling 9 ORGs w/ Scientific Data within 2 hrs
Alternate Item & Routing Just Guess the numbers
1.Regularly maintain Alternate Routing &
Alternate Item
2.If Master routing is full,
alternate routing will be initiated
3.Keep watchingthis progressive improvement
Capacity fulfillment for
Internal production & outside
supplier
1.Capacity did not consider in MRP
2.Buyer always push Supplier
like firefighting
1.Reflect the real capacity status
2.quick judgement on OSP or not
Order Promise 1.Sales call PMC2.PMC feedback Promise Date
1.Sales directly get Promise Datewhile SO is created
Forecast consumed by Sales Order
1.PMC consume FCST
w/ SO in Excel manually
2.Input the Net Value into MRP
1.No manual involvement on consumption
2.Help Sales focus on FCST and
SO accuracy
PAIN Point
Business Gains
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Move from MRPto Advanced Planning
How we approach it
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Wed: FCST & SO Enter
Run Consume plan( Data Collection , ODP generate FCST)Sales review consumption report and modify FCST
Run ASCP-I (capacity & critical item )
Host Interlock Meeting between GPMC+LPMC+Sales
------------------------------------------------------------------------------------------------
Thu: Interlock meeting (Check ASCP-I +Modify SO, FO Shipping Date)GPMC run Net Change (modify capacity, make item schedule)
PO release for Critical Item + Commit Critical Item Schedule
Data Collection (SO/INV/WIP/PO only)
Run ASCP-II (capacity & All item )
-------------------------------------------------------------------------------------------------------- Fri : Release PO,IR,WO
A Planners Daily Life in a Week
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Move from MRP to Advanced Planning
Share Lessen Learnt with You Phase Approach for Advanced Planning
F MRP Ad d Pl i
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From MRP to Advanced PlanningA Rapid ROI Approach
Oracle Applications(10.7, 11.0, 11i)
Readiness
Assessment
Unconstrained ASCP
(Multi-Site MRP)
Constrained ASCP(Single Holistic Plan)
Constrained ASCP(Multiple Sequential Plan)
Optimized ASCP(Plan Optimization)
Time
AddedValue
Phase 0
1 Wk
Phase 1
2.5 Month
Phase 2
2.5 Month
Phase 3
1 Month
Constrained
Unconstrained
Optimized
Option 1
Option 2
A single plan across all sites Reduce planning cycle time Improved exception resolution Online planning Integrated performance
management
Constrained global masterplan for key components andresources
Plus constrained site leveldetailed plan
Improve plan quality by
recommend alternates Generate feasible plans
Constrained single holisticplan for the entire supply chain
Improve plan quality byrecommend alternates
Generate feasible plans
Priority based decisions Cost based optimization
You Are Here
ORACLEASCP Service RapidTime To Value
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